Accounting and Financial Analysis Report and Controlling

Question: Describe about the Accounting and Financial Analysis Report and Controlling. Answer: 1: The policy on the Financial Reporting states that controlling body of the company and all its groups related and connected exercised extreme control related to the Record, Preparation of the Annual Reports in true and fair value. They also have stated that despite all reports being done by the common chief executive and finance officer as a result of certain critical difficulties and lack of proper analysis there will be no absolute assurance in prevention of fraud or error in financial statements. (Riotinto, 2015). The management have in preparation of financial reports complied with all necessary framework laid by the government which are as follows: Proper System of Financial Reporting structure drafted by Committee of Sponsoring Organisations of the Treadway Commission (COSO) in order to have internal control effectiveness. The financial reports were all prepared with compliance to UK Companies Act, 2006 along with Australian Corporations Act, 2001. The Salary and Wages details are done as per the Regulation 11, Schedule 8 of Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008 along with Australian Corporations Act, 2001. The management for the purpose to have better systems as per Rules and ASX Rules Recommendations 7.3 have confirmed that the financial reports prepared by the company are as per the risk management, internal control, and financial reporting risk.(Asic, 2016). The group maintains the disclosure controls and procedures strictly in compliance with the Exchange Act Rule, 13-a-15(e) and use of this pattern. The system of any declaration control procedure in compliance with the Exchange Act, Rule 13a-15(b). The management, and all the accounting officers, managers, clerks along with other staff must be careful and take all necessary measures and exercise proper and correct judgements during the submission of all reports of accounts and supposed be acting with great clearness and transparency are required to maintain their ethical standards as per the profession desires. 2: The various legislations are to be used for the purpose of preparing any financial reports and statements. These legislations are done by the government of the country in order to maintain a control and observation of the businesses going on in the country to maintain an economic balance within the given framework. If there was no control then these companies would have done anything they wanted thus making the financial framework related to the business operations a free place to do anything they wanted to make gains for their personal requirement. Hence the requirement of the control part arises and the government tries to make certain guidelines for the businesses to follow and maintain financial reports in accordance to these legislative jurisdictions(Aasb, 2016). These legislative instruments mentioned in the policy of the Rio group are as follows: Detailed system structure formulated for Committee of Sponsoring Organisations of the Treadway Commission (COSO) for checking the internal control effectiveness. The financial reports were all prepared with a purpose of adhering to UK Companies Act, 2006 and Australian Corporations Act, 2001(Legislation, 2001). The Wages and Salaries details are scripted by following guidelines of the Regulation 11, Schedule 8 of Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008 including Australian Corporations Act, 2001.(CorporationAct, 2016). The management for purpose of maintaining correct accounting system as per Regulations and ASX guidelines Recommendations 7.3 has confirmed that the financial reports prepared by the company is as per the risk related system development for better record keeping . This group maintains the disclosure controls and procedures strictly in compliance with the Exchange Act Rule, 13-a-15(e) and right use of pattern the system of declaration control procedure in compliance with the Exchange Act, Rule 13a-15(b). 3: AASB guidelines for maintenance of accounts and record keeping with the purpose of true and fair value were amended from 1st July, 2014. The framework can be stated as follows: The Framework is applied from 1 January, 2005 for annual reports from this date. The Framework is not for making accounting reports with an aim to just bringing out ordinary information related to the true and fair position of the business finances.(Aasb, 2015). The most important feature of this Framework is that it can supersede the following: SAC 2 Objectives of General Purpose Financial Reporting as per its issuance. SAC 3 Qualitative Characteristics of Financial Information as per its issue. SAC 4 Definition and Recognition of the Elements of Financial Statements as per its issue.. SAC 2, SAC 3 and SAC 4 remain effective until they overruled by these new guidelines of GPFS.(Aasb, 2016). The main purpose of this Framework is to set out clear guidelines for external people in preparation and presentation of the financial statements. These Framework related detailed guidelines are as follows: It helps AASB to prepare any proposed Australian Accounting Standards or AAS related guidelines and to review any in force AAS and also in evaluation of the proposed International Accounting Standards Board declarations. It also helps AASB to develop a uniform process of rules, systems of making accounts as per the fixed guidelines for producing correct accounts related reports and in reducing the different accounting treatments allowed by Australian Accounting Standards. It helps to prepare financial statements by applying topics which are not yet part of the Australian Accounting Standards. It helps auditors to decide whether a financial report prepared conforms to Australian Accounting Standards. It helps to understand the financial statements prepared with various informations are with conformity with the Australian Accounting Standards. It helps to understand the way is working on the AASB guidelines and approach in formulating Australian Accounting Standards. 4: The General Purpose Financial Statements or GPFS are required to include all disclosures by applying accounting standards. The companies which fall under the public accountability will be required to prepare the accounting statements where they need to list debt or equity or also need to declare the assets they are holding on behalf of others. The companies must consult to find the actual requirement of this GPFS through the consultation of AASB 1053 Application of Tiers of Australian Accounting Standards to find whether these companies are falling under public accountability category. Tier 2 financial statements are easy than others as in this type the number of disclosures reduce if they do not fall in the public accountability category. But the companies who are already preparing special purpose financial statements, they will be required to continue with the disclosures they were making till the introduction of GPFS. The impact of this new system will be mainly on those who ar e called SGEs or SGEs whose yearly consolidated total business earnings are $ 1 billion or more and they are taxed as companies which include all major types of business entities who are in global business with multinational presence. (Pwc, 2016). All entities including the subsidiaries within these groups are also considered as SGE. There may be non-corporate tax entities like individuals, discretionary and unit trusts may also be considered SGE although they dont have to report. The GPFS will now include some entities that were earlier relived from reporting requirements. These entities are as follows: Australian foreign company branches that do not have branch accounts. Foreign group subsidiaries that follow ASIC CO 98/98 small propriety companies but are controlled by foreign companies who are part of SGE then these companies will also have to start GPFS. The wholly owned subsidiaries that gets relief under ASIC CO 98/1418 wholly owned entities if the parent company files GPFS. Australian exempt propriety companies or those privately held but are SGEs. Reference: Aasb. (2016). Accounting Standards. Retrieved October 24, 2016, from Aasb: https://www.aasb.gov.au/About-the-AASB/For-students.aspx Aasb. (2015). Presentation of Financial Statements. Retrieved September 30, 2016, from https://www.aasb.gov.au/admin/file/content105/c9/AASB101_07-15.pdf Aasb. (2016). The Standard-Setting Process. Retrieved September 30, 2016, from https://www.aasb.gov.au/About-the-AASB/The-standard-setting-process.aspx Asic. (2016, March 23). Users of financial reports. Retrieved October 24, 2016, from Asic: https://asic.gov.au/regulatory-resources/financial-reporting-and-audit/users-of-financial-reports/ CorporationAct. (2016). CORPORATIONS ACT 2001 - NOTES. Retrieved September 17, 2016, from https://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/notes.html Legislation. (2001). Corporations Act 2001. Retrieved September 09, 2016, from https://www.legislation.gov.au/Details/C2013C00003 Pwc. (2016, February 25). New Financial Reporting Requirements for Private Businesses . Retrieved October 24, 2016, from Pwc: https://www.pwc.com.au/private-clients/publications/new-financial-reporting-requirements.pdf Riotinto. (2015). Governance framework and structure. Retrieved October 24, 2016, from Riotinto: https://www.riotinto.com/aboutus/governance-framework-and-structure-5229.aspx